putting money into a bond - tax gotcha
 

all
just thought id share this 'gotcha' that is still following us several years after our move over here.

we moved on a skills visa but were 5 points short of the requirement hence we elected to deposit $100K into a government bond to gain those 5 precious points from the sale of our house in the uk knowing we wouldnt want to use it for a year. I was the primary applicant so when the money was deposited it was in my name only.

a years interest on that was $4200 for us

im now facing a tax bill on the entire amount (nearly $2000) when the original investment was effectively a joint one.

bottom line: get both of your names on the bond when you lodge in order to split your tax liability later on (this works for us as claire is home looking after the kids)

Re: putting money into a bond - tax gotcha
 

Wow - how did that happen!.

- I thought that for tax purposes all your assets jump up to their value at time you enter the country

- That means you should only pay capital gains tax on the gain from the time of arriving - so the interest on the 100k is the only taxable thing.

- Did you provide tax file number to the bond people? I think they deduct tax automatically if you dont.

- So how did tax on 4200k equate to 2000 ?

Im asking because of course there are lots ofus in same situation ;-)

Re: putting money into a bond - tax gotcha
 

we entered the country and had a savings account-the bond- with an annual interest rate of 4.2%. they had a tax file number so no interest was removed. half of the interest was paid in one tax year the next in the next.

at the end of the first tax year i declared 50% (circa $1050) of the interest earned on my tax return. the ATO came back to me with "you earned $2100"

im currently telling them that the original $100K was from our house sale, they now require proof that the house was jointly owned....now the bad bit-i bought the house before we got married and we never put it in joint names..bummer..so we're trying to find were we put the money in the interim...oh joy.

if you can tell me the ATO are wrong then please do!

Re: putting money into a bond - tax gotcha
 

We had to pay a bond , on the interest we paid tax then when we got a TFN they returned the tax , we phone ATO regarding tax returns you do not have to claim monies bought into the country when moving they are only interested in the money you have earned.

I think you should phone ATO or speak to an accountant, there are 100's of people on here who pay bonds and this is the 1st time I ever heard of this

Re: putting money into a bond - tax gotcha
 

In response to the last poster, I think the OP is referring to the interest on the $100k deposit ... which is wholly assessable as income.

Best regards.

Re: putting money into a bond - tax gotcha
 

Ooooppppppsssss...............then maybe I should have put it on my tax return :eek:

Re: putting money into a bond - tax gotcha
 

If it was paid to you after you became a tax resident of Australia ... probably yes ...

Best regards.

Re: putting money into a bond - tax gotcha
 

damn.. there goes that plausible deniability ......the internet is full of bad things

Re: putting money into a bond - tax gotcha
 

hence the "make sure its in the bond under both your names" or ideally under the name of person who will earn the least